INDIA: An Introduction

The world’s fifth largest economy – in its quinquennial parliamentary elections in 2024 – saw the incumbent Bharatiya Janata Party (BJP), led by Prime Minister Narendra Modi, winning the elections for a third straight term. A key difference from the BJP’s previous two electoral wins, however, was the lower-than-expected margin of victory. As a result, the new coalition central government may have to face competing interests from allies, and deal with a numerically stronger opposition in parliament.

Nevertheless, because the government essentially remains the same, there is a general expectation of overall policy continuity for businesses. This optimism is evident from the exuberant equity markets in the country, growing at a rate higher than that of most of their regional or global peers. The economy remains diverse and is growing exponentially, leveraging its large domestic market, its demographic dividend and its burgeoning middle class.

This policy continuity is evidenced also by the new government’s legislative activity, bringing into effect changes made earlier. Notable among these is the decriminalisation of over 180 provisions in 42 central statutes. Changes to laws (cleared by parliament earlier) dealing with information technology, Aadhaar (India’s unique identity system), film piracy, and intellectual property, have now been notified. Consequently, many acts are no longer considered offences, and penalties have been rationalised to reflect the nature of the offences committed.

The biggest change in the Indian legislative map, however, is the coming into force of three criminal laws replacing the colonial-era body of criminal laws dealing with penalties and procedure. The statutes, ie, the Bharatiya Nyaya Sanhita, 2023; the Bharatiya Nagarik Suraksha Sanhita, 2023; and the Bharatiya Sakshya Bill, 2023, came into effect on 1 July 2024, and now stand in place of the Indian Penal Code, 1860; the Code of Criminal Procedure, 1973; and the Indian Evidence Act, 1872, respectively. The new laws are expected to significantly modernise and upgrade the Indian criminal justice system through, among other things, ensuring “victim-centric” justice, digitised legal processes, modernised evidence-handling by allowing electronic and digital records, and mandatory forensic investigations. An overhaul of the criminal justice system would be overwhelming for any jurisdiction, and India is no exception. But hiccups in transition and implementation will likely be ironed out over the coming months and years.

Indeed, modernisation is a running theme in the Indian legislative and policy landscape. The legislature and government are responding to technological advances impacting society and the economy slowly but surely, after considering all stakeholder views and attempting to strike compromises where possible.

For example, the Press and Registration of Periodicals Bill, 2023, replacing an 1867 law, reflects a responsive approach to the changing media landscape and governance priorities, emphasising efficiency, accessibility and regulatory clarity. It introduces a streamlined and modernised registration process for periodicals (including foreign ones), such as online applications, and it has eliminated mandatory declarations. On the other hand, the Telecommunications Act, 2023, is conveniently ambiguous in its definition of “telecommunication services”, so as to keep open the option of potentially regulating “over the top” (streaming) services. While general regulatory oversight on newer forms of services has been welcomed, concerns about privacy, government intervention and regulatory stringency remain.

Other examples of active policy conversations around the impact of modernisation and technology can be seen in the guidelines issued by the Central Consumer Protection Authority on “dark patterns” (ie, deceptive design techniques used especially in e-commerce to manipulate users into making certain kinds of decisions), and the Law Commission’s report and accompanying draft bill on trade secrets (which remain unlegislated in India as yet).

The commitment to keeping India business ready and updated in response to, and in step with, global developments, is another recurring theme that has transitioned seamlessly across government tenures. This can be seen in many regulatory fixes and changes. For example, the facilitation of dematerialisation of shares by certain private companies ensures enhanced transparency, maintains the integrity of India’s financial markets, aligns India’s corporate sector with international practices, and improves overall investor protection. Similarly, new rules on overseas listing and non-debt instruments notified in 2024 have paved the way for public companies in India to list their equity shares on permissible international stock exchanges in Gujarat International Finance Tec-City – International Financial Services Centre in India (“GIFT-IFSC”). This now enables Indian companies to tap global markets to raise funds, and will help public companies attract foreign investment and receive enhanced valuations. The impending growth opportunities, a broader investor base, and a global presence, will directly impact the prospects of the Indian economy.

India is also signalling to the world that even the sky, literally, is not the limit for its growth aspirations. Every fiscal year, the government revisits the extant foreign investment regime, which defines the limits and routes for such investment into various sectors. For India, being a developing country transitioning out of low-middle income status, the process of liberalisation must arguably be measured and weighed carefully against domestic interests and priorities, and sectors must be carefully assessed for their viability for foreign investment. Recently, the rules around foreign direct investment in the space sector have been liberalised, relaxing the previously mandatory requirement for investment through 100% prior government approval only in some areas. The government has already made clear its intentions to promote private sector participation in the space economy, with the 2023 Indian Space Policy. The amendment now substantially increases the capital available for the Indian space sector. India already has an enviable reputation for building cost-effective satellites, and for taking hundreds of foreign satellites to space. Its aspirations to reach a share of 10% of the global space economy by 2030, five times its present share, will be accelerated, with new investments spurring the pace of research, development and deployment of solutions in satellite manufacturing, launch services and space exploration.

The India story has not only been about major policy and legislative changes, but also about the (relatively) mundane, but immensely necessary, process and infrastructure fixes. New changes in the intellectual property arena have been notified (amendments to the rules on patents and trade marks, as well as amendments to the Biological Diversity Act, 2002). Discussions are actively underway on revisions to IP manuals and guidelines. A new IP division has been set up in the Calcutta High Court, following similar moves by the Delhi and Madras High Courts. India also now has a new law on mediation, thus expanding oversight to additional forms of alternative dispute resolution (arbitration and conciliation already have a long statutory history in India). This new law provides a framework for institutional, community and online mediation, as well as a process for enforcing mediated settlements, and registration of mediators. All of these changes collectively seek to alleviate the pressures on an already overburdened judicial system, variously through triaging of disputes, process re-engineering, and keeping service providers accountable, all the while ensuring that the wheels of justice do not stop turning.

This past year has been one of transitions for India, with the electorate finding a new voice, and the government having to navigate new power balances. As a result, much of the legislative and policy activity has been around consolidating what has already been discussed, and delivering what was promised in the past. With a healthy mix of major and minor changes  impacting a diverse range of sectors, as well as tackling fundamental regulatory infrastructural issues, India is bracing itself for the next surge of growth.